In the spring of 2005, David Stockman at last reaped the reward of the monopolist. Stockman, who once served as Ronald Reagan's budget director, spent two decades on Wall Street preparing for this moment. After stints at Salomon Brothers and the Blackstone Group, Stockman in 1999 set up his own private investment fund, Heartland Industrial Partners. He then used Heartland to shape a set of companies -- mainly in the automotive sector -- each dedicated to dominating a particular group of production activities. Of all Stockman's efforts, his most audacious centered on a firm named Collins & Aikman. Stockman used C&A as a vehicle to buy up small producers of interior components like dashboards and seats, and he swiftly captured a position supplying parts to more than 90 percent of all cars built in America. Although the acquisition spree left C&A saddled with debt, Stockman was so pleased with C&A's prospects that in 2003 he assumed control as chief executive officer...

W hen Robert Mao describes the fantastic manufacturing opportunities his company sees in China, he speaks with mixed feelings. "For the first time in the modern era," he marvels, "we have an inexhaustible reservoir of good, trainable labor." But Mao, who as president and CEO of Nortel Networks China has worked in the region for 20 years, also worries about what that means for China's neighbors. For the foreseeable future, he says, almost all new investment by Nortel suppliers will go to China and not to other Asian countries. So, too, he expects, will most major investments by other global manufacturers. "What can Taiwan, Malaysia and the Philippines do?" he asks. "They offer pretty much the same degree of technological sophistication as China but they are more expensive and lack the scale. What will they do?" His concern is well-founded. In 2001, China absorbed 75 percent of all foreign direct investment into Asia's developing economies, a complete reversal of the ratio of 10 years...

P aul Veryser's steel-parts company, Stampings Inc., is in big trouble. Tariffs on steel imports, imposed by President George W. Bush in March, have pushed the cost of steel up by more than half on the American spot market, and this has added a whopping 25 percent to the cost of the air-bag, seat-belt and steering-wheel assembly parts his company makes. The higher costs wouldn't be so bad if the Fraser, Mich.-based company could pass them on to its customers, mainly the big automakers and their top suppliers. But most of these companies refuse to pay, Veryser says. Whenever he dares ask, he's told there are plenty of alternative suppliers overseas, in places such as China and Mexico and Thailand. Labor is a lot cheaper in those countries, and now the steel is, too. "I'm the one who has to eat the extra cost," says Veryser. "And I just can't do it anymore." In September he shut Stamping Inc.'s plant in Harlingen, Texas, and laid off the 15 workers there. Without relief soon, he says,...